Unemployment Insurance Fund's Financial Statement Release for 2017

Unemployment Insurance Fund     Financial Statement Release     20 March 2018 at 11:00

The Unemployment Insurance Fund's (TVR) result for the financial year 2017 showed a surplus 

• Unemployment insurance contributions and other income in total EUR 4,011 (4,083) million
• Unemployment benefits paid and administrational expenses in total EUR 3,434 (3,859) million
• Change in net position (for the financial year) EUR 572 (220) million
• Net position EUR 106 (-466) million
• Investments and assets in total EUR 1,125  (704) million
• Raised debt and other liabilities in total EUR 1,018 (1,170) million
• Unemployment rate on average 8.6% (8.8%)
• Return on investments 0.1% (0.3%)

Financial information for 2016 is presented in parentheses.

Managing Director Janne Metsämäki:

"The Finnish economy's positive development was sustained in 2017. The national economy's actual pace of growth clearly outstripped the cautious expectations. The employment rate increased, and the number of unemployed jobseekers in particular fell significantly. The Unemployment Insurance Fund's finances clearly reflected this economic upturn.

The unemployment insurance contribution accrual exceeded the expectations as the total payroll increased and the total volume of earnings-related benefit payments decreased. Performance of the Fund's finances was therefore considerably stronger than expected, with a surplus of EUR 572 million. This also meant that the Fund's net position turned positive at the end of 2017.

Compared to the recent years, the sharp economic upswing will provide the Fund with the opportunity to increase its business cycle buffer, as the current debts will be paid off according to plan this year and next year.

This year, the Unemployment Insurance Fund will celebrate its 20th year in operation. Over the past two decades, the Fund has acquired an important role with many responsibilities for funding unemployment benefits. On several occasions, the business cycle buffer managed by the Fund has been required to curb the upward pressure on unemployment insurance contributions.

In the first half of 2017, the Fund renewed its revolving credit facility, which is now EUR 400 million, including a state guarantee by the Government. The credit facility was not utilised during 2017. The Fund's credit rating was confirmed in September 2017, remaining on a par with the Finnish Government's credit rating.

The National Incomes Register will be launched at the beginning of 2019. The Fund will be included in the first phase of the Register and has prepared for it by contributing to the law drafting at the Ministry of Social Affairs and Health. The Fund is in the process of building a new unemployment insurance contribution information system for the National Incomes Register. The Fund seeks to make full use of the Register, which will lighten the administrative burden of employers. The reconfiguration of the Fund's operating model and organisation will enable us to respond to the demands of our changing operating environment and provide even better customer service.

The Fund managed its activities successfully in 2017. For example, the Fund's customer service was given an important acknowledgement when the Fund won the Contact Center of the Year award.

In the summer of 2017, labour market confederations proposed that the Unemployment Insurance Fund and the Education Fund be merged to form a new fund, which would begin operations at the beginning of 2019. The Funds already cooperate on a range of issues. The preparations for merging the Funds began in the autumn. In legal terms, the Education Fund will be incorporated into the Unemployment Insurance Fund. Operationally, however, our objective is to create a completely new fund with a new name.

For the Unemployment Insurance Fund, 2017 was a year when we continued our preparations for the many changes ahead of us. In addition to these change projects, we have been carrying out our statutory activities. The Fund's employees have worked hard, demonstrating their professional skills and a great team spirit in meeting our statutory objectives. I would like to offer our people my thanks for the excellent results they have achieved."

Key figures

* Contributions from the MSAH included  year 2014 onwards

Events after the reporting date

The positive economic development has been sustained in the first quarter of 2018. The economy has been growing faster than in years, and the decrease in the number of unemployed jobseekers is expected to continue from 2017. The Fund's net position turned positive at the end of 2017 and, according to its budget, the change in net position for 2018 should be a positive EUR 400 million. However, at the time of preparing the financial statements, it is estimated that the change in the Fund's net position will be around EUR 550 million in 2018.

The Unemployment Insurance Fund has carried on with the preparations for the new Incomes Register, to be launched at the beginning of 2019. Preparations for the merger of the Unemployment Insurance Fund and the Education Fund, planned to take place at the beginning of 2019, have also continued. Determination and collection of unemployment insurance contributions have been carried out as planned, and the level of service has been good despite the peak season at the end of the year.

Financial Statement Release 2017 

This Stock Exchange Release is a consent of TVR's Financial Statement Release 2017 ja consists the most relevant information of that Release. Financial Statement Release 2017 is published in full as a pdf file attached to this Release and is also available in TVR's website at tvr.fi 

The Financial Statement Release 2017 is unaudited.

Financial releases in 2018

Annual report 2017 is published in TVR's website on 21 March 2018. The Interim report for the period 1 Jan - 30 Jun 2018 will be published on 28 August 2018.

Additional  information:

Janne Metsämäki, Managing Director. tel. +358 40 522 3614
Tapio Oksanen, Deputy Managing Director, CFO tel. +358 40 539 4651

Helsinki, 20 March 2018

Unemployment Insurance Fund (TVR)

Tapio Oksanen
Deputy Managing Director

Distribution:
NASDAQ OMX Helsinki
Media
www.tvr.fi